E.J. Brach Son v. Stewart

^* Headnote 1. Agency, 2. C.J., section 455. The appellee, J.S. Stewart, filed his bill in the chancery court of Lee county seeking to recover commissions on sales of candy in the state of Mississippi by Brach Son, the appellant, with ten counties excepted; and there was an attachment in the chancery court certain debtors of appellant, Brach Son, being made defendants as garnishees. The bill is founded upon an oral contract found to exist by the chancellor between Brach Son and Stewart for the sale of their candies for the exclusive right to sell their candies within the territory described. After Stewart had been traveling and engaged in selling the candies for seven or eight days, Brach Son concluded to breach this contract and put a number of representatives in the territory selling the candy, to which Stewart demurred and demanded that these representatives be kept out of his territory. After some negotiations, Brach Son decided to retain their representatives in the territory and, in the language of the record, fired Stewart.

The contract was to run from the ____ day of ____ until January 1, ____. And when the contract was made, the representative of Brach Son said to Stewart that he could easily make five thousand dollars on the contract in the territory. The method for proving damages for the breach of the contract adopted by Stewart was by showing the amount of sales made to the different classes of trade within the territory by Brach Son and the commissions for sales to jobbers, variety stores, and retail trade therein amounting to one thousand fifty-nine dollars and twenty-three cents which amount the chancellor decreed to be due Stewart from Brach Son for the breach of the conract.

There was evidence amply sustaining the chancellor's view of the contract, and that it was breached, and the only serious question presented here is as to whether or not the court adopted the proper rule for ascertaining the complainant's damages for the breach of the contract.

Appellant argues strenuously that the contract was made by the complainant Stewart as a broker, and not as a traveling salesman. We think the chancellor in the court below correctly found that this was a contract for sales in territory exclusively given to the agent, and that the rule for ascertaining the measure of damages adopted in the court below was necessarily the correct one, as in a case where the territory is exclusively given to an agent or traveling salesman or broker, and the territory is invaded by the other party to the contract and sales made, one of the ways of proving damages for the breach of the contract is to show the sales made by the offending party and the commissions thereon. The measure of appellee's damages for the breach of his contract is the amount of commission of which appellee is deprived on account of sales made by the appellant in the invaded territory. In Sparks v. Reliable Dayton Motor Car Co.,85 Kan. 29, 116 P. 363, Ann. Cas. 1912C, 1251, the Kansas court held, where an automobile agency was involved:

"The measure of damages for breach of a contract giving the plaintiff the exclusive agency for the sale of automobiles where the manufacturer invades the plaintiff's territory is the amount of commissions or discounts of which the plaintiff is deprived by sales made by the defendant. In such an action the defendant by selling in the plaintiff's territory in violation of the agreement is estopped to claim that if he had not done so the plaintiff would not have made the sales."

Quoting from the case supra: "The question as to the proper measure of damages in such a case was before the California court in Schiffman v. Peerless Motor Car Co., 13 Cal.App. 600. That was an action for the breach of a contract for an automobile agency by the manufacturer invading the plaintiff's territory contrary to the agreement. It was held that the proper measure of damages was the amount of profits of which the plaintiff was deprived by the sales made through other agents in his territory. In the opinion it was said:

"`There is nothing speculative or uncertain as to the amount of profits of which plaintiff was thus deprived, and their loss is so closely connected with the breach of the obligation by defendant that it is difficult to see any ground upon which it can be said that plaintiff's injury is too remote either in nature or origin.' . . .

"This is in accord with the general rule that damages for the breach of a contract are those which are the direct and proximate results of the wrong complained of. 13 Cyc. 156, and cases cited. It was, of course, the duty of the defendant to refer to the plaintiff all inquiries for cars in his territory. Had they done this and refused to make the sales the presumption is that he would have made them. Besides, the defendant is stopped by its wrongful conduct to say that the plaintiff would not have made the sales."

We are unable to adopt the view of appellant in this case that it or the court is concerned with the proposition of whether Stewart was a traveling salesman or a broker, for the reason that the contract as found to exist by the chancellor was for certain territory exclusively, and certainly it is not an unfair rule to say that the plaintiff might have recourse to the method of showing the sales made in the invaded territory by the appellant in violation of the agreement, and recover the commissions thereon.

We find no reversible error in this record.

Affirmed.